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Papering over the cracks

For several years there has been a steady stream of – often venerable and well-known – companies changing their names, usually to something international and meaningless. There can be sound reasons for a name change, but all too often it is an

It’s a funny old world. In the same month that Consignia chairman Allan Leighton said that his company’s name “attracts derision” because it ignores the Post Office’s rich heritage, CGNU – the insurance giant formed following the merger of CGU and Norwich Union last May – announced that it is changing its name to Aviva as part of a &£1m rebranding.

Quite apart from the fact that the company now shares its name with a shop just 300 yards from its Norwich headquarters, the new name sounds similar to a number of others – including Arriva, Aveda and the old Vauxhall Viva. And at first glance the rebranding threatens to send CGNU down the same rocky road as Consignia.

But there is a sign that lessons have been learned: the company says it will retain the Norwich Union brand in the UK, with the words “an Aviva company” underneath.

Although the name was apparently dreamt up in a brainstorming session, it transpires that Aviva is the Hebrew word for “joy of spring”. The corporate rebranding will have to be approved by shareholders in April.

CGNU director of group brand development Jon Athawes says: “The CGNU name wasn’t liked, internally or externally, and was only a temporary name following the merger of Norwich Union and CGU. It was an uncomfortable combination of initials and was difficult to pronounce.”

The new name, according to Athawes, has connotations of “life”, tying in with the company’s insurance products. He claims: “We were keen to avoid a totally contrived name.”

He says the company decided to keep the Norwich Union name after an audit of its brands worldwide. NU is one of five CGNU brands – from a total of 25 – which will retain their names. Athawes explains that NU “has a very strong heritage”.

Renamed and shamed

CGNU is one of a plethora of companies to play the name game. But the success – or otherwise – of many name changes highlights what a risky process it can be.

Consignia is a good example. Before the name change, which cost about &£2m, the Post Office was the UK’s second best-known brand (after Coca-Cola). The rebranding to Consignia has coincided, and become synonymous, with its decline. Consignia last month announced plans to cut 30,000 jobs while suffering losses of &£1.5m a day.

Such is the depth of feeling that the Communication Workers Union, which represents many of Consignia’s employees, has this week written to all local and national newspapers and radio stations, asking them to refer to Consignia as the Post Office in a bid to effectively wipe out the name.

This may be an extreme move but, when national heritage is at stake, a name can take on great significance. Ironically, Consignia says it cannot afford to change the name back.

CWU general secretary Billy Hayes says: “‘Consignia’ brings to mind a profit-centred, declining, competition-ridden, low-wage outfit in crisis. ‘The Post Office’, on the other hand, suggests service to the public, decent wages and conditions to which people can aspire and a seamless, integrated postal service for all.”

O2 watches with bated breath

Watching events carefully is BT’s demerged mobile operation, now called mmO2. The company is set to rebrand BT Cellnet as O2 next month.

MmO2 vice-president of global marketing Will Harris says the secret to a name change is to find out how your customers view the products you are selling. The mmO2 name was, apparently, created because focus groups saw their mobile phones as an essential part of their lives – like oxygen.

Harris says: “Everything [in the mobile industry] until now has been about voice communication. The next generation is more about words and text. A brand that worked well in the old world won’t work in the new world.”

Harris says that any name change must be supported by sufficient promotion and explanation about the purpose of the change: “You have to distinguish between a name and a brand. I don’t think Consignia even tried to promote its new identity. It changed the name without explaining what was behind the change, so it was a waste of time.”

But coming up with a good new name is a problem in itself. Simon Avison, managing director of strategic brand consultancy New Solutions, says good names are hard to find: “It’s very difficult, because every sensible name has been registered, or at the very least the Web address has been taken.”

The City is putting increasing pressure on companies to look at their strategy. Harris says: “The City nowadays is more knowledgeable about marketing. FTSE-100 companies used to be mostly customer-focused, but now they have to concentrate increasingly on avoiding criticism from the City.”

Companies also change their names because they want to change their focus. Royal &amp; SunAlliance Property Services changed its name to Sequence because – as chief marketer Mike Sommers says – the old name suggests “that we are going to thrust financial services products on customers”.

Sommers says name changes are often seen as a simple way of solving fundamental problems about a business. Jewellery group Ratners changed its name to Signet after Gerald Ratner referred to his products as “crap” during a speech to the Institute of Directors.

Sommers warns that changing the name is only the start of a long process: “Nowadays, people worry too much about the door knocker and not enough about what is inside. People think that changing the name is a magic solution. They should be worrying about customer service.”

Avoid slips of the tongue

Another challenge is to develop a name that will be recognised around the world without being offensive in any language. This is reflected in the widespread use of Latin-inspired names, which can have connotations in a variety of Romance and Latin-influenced languages.

With globalisation and the attendant diversification of companies into new markets, the challenge is to strike a balance between a name that is effective and one which is territory-neutral. A good example of this neutralisation is the rebranding of One 2 One to T-Mobile, due to take place later this year.

But Sommers says that these names may be transient: “If you come up with a new name today, you have to come up with something that doesn’t mean anything in any language; a name which almost means something, but not quite. The problem is, the names will probably date very quickly.”

A name, while remaining unchanged, can transcend its original heritage and become synonymous with brand values. The Carphone Warehouse, for example, is the UK’s leading independent mobile phone provider, but it doesn’t sell “carphones” any more and it does not sell out of warehouses.

Similarly, Rentokil Initial doesn’t just kill pests. The company not only decided to keep its name as it expanded, but has even applied the Rentokil name to its tropical plant supply and management outsourcing services.

Rentokil Initial group manager for corporate affairs Tony Stephens says: “Rentokil is a huge brand and we’re very proud of it. It has come to stand for quality. It would be a major event if we were to give away our name.”

Stick to what they know

One of the most recent examples of a company sticking to its roots is HBOS – the bank formed from the merger of Halifax and Bank of Scotland. The company has resisted giving itself a completely new name and both brands will remain on the high street.

James Boulton, head of brand marketing for HBOS’ retail division, says: “I am a great believer that a name has to make sense. Often the renaming route is taken by executives who are more concerned with their own positions than with the consumer.

“In our case, a customer is either a Bank of Scotland customer or a Halifax customer. Bank of Scotland has 300 years of heritage. Some companies make the mistake of deserting their heritage.”

Boulton’s views are shared by Citigate Lloyd Northover vice-chairman Jim Northover. He argues that competition between companies, coupled with the emergence of Internet companies, has put pressure on managers to look for ways of revitalising their businesses.

He says: “Often a name change is a knee-jerk reaction to a merger or a problem, or a change of direction. Companies really need to ask what their objectives are before changing.

“If your business has a strong brand, you should think twice about changing its name. A company with a name which doesn’t fit with its new direction may still be a powerful brand and should not be ditched without serious consideration.”

Diageo, for instance, was formed through the merger of Guinness and Grand Metropolitan and the adoption of a generic name symbolised the company’s plans to be active in several business sectors.

Sommers argues that ditching the Guinness heritage was a mistake: “If there is a merger, the name is often changed because of management sensitivities, particularly in the junior company. In the case of Guinness, why didn’t the company pick a brewery-related name? The irony is that, having picked a name to reflect the diversity of the business, Diageo is now busy disposing of non-core activities like Burger King.”

There can be some good reasons for changing a name. If a company wants to facilitate expansion plans, wants to escape its heritage or wants to highlight a change of direction, a new name can be a very powerful signifier of a new start. If the new name has solid foundations in the company, and is thoroughly researched internally and externally, it may have a chance.

But change for the sake of change can be dangerous. If a name has heritage and signifies values which can be passed down to different brands, there is no reason why it should be changed – even if it does not necessarily relate to the new direction. To the consumer, the values behind the name often mean more than the name itself.

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